How to Speed Up Fundraising Due Diligence

As the founder of a startup that is seeking funding, it is important to be prepared to give investors who are able to raise equity funds like venture capital companies or angel financing with the information needed to conduct due diligence for fundraising. This is the procedure where interested parties look into a business in order to confirm important metrics and specifics, meet investment criteria, and examine potential risks prior making a decision to invest.

During the due diligence phase, VCs may ask for documents regarding your business, including taxation, legals, financials and compliance. Due diligence can be speeded up and delays minimized by having these documents easily accessible. A VDR can allow you to store these documents, give instant access to them and manage permissions to determine who can access what, while ensuring that your sensitive information is only shared with the people who are the ones you want to access it.

In addition to the VDR There are other tools you can use to accelerate the due diligence process. They include setting up a system that automatically uploads important files to an organized folder. This will decrease your workload as you will no longer have to manually organize and upload documents. It’s also helpful to establish a schedule of when you’ll have to submit each piece of documentation, so that the VC knows when you’re ready to provide it.

Another way to prepare for due diligence process is to instruct your gift officers in fundraising due diligence. This includes gift acceptance policies. This can include creating an inventory of trigger criteria that, when met, will require an in-depth risk rubric. Examples include international prospects as well as scandals or crimes known to the public, and solicitations that exceed a certain dollar amount, like naming donations.

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